Kobo: The Heavyweight Challenger?


I interrupt the second Tip Tuesday to talk about something that will have vastly more impact on your writing career than eliminating adverbs or what back matter to put in your books.

Back in early June, eReader company Kobo announced its launch of Writing Life, a platform for independent authors to self-publish their works. I came a little late to this game, but with some persistence emailing the Kobo Support Team, I was able to glean a few details that I’m not sure are publicly, or at least widely, available yet.

Who is Kobo and why are they important?
While Amazon is certainly the 800 pound gorilla in the epublishing arena, many agree that its most feared competition isn’t Barnes & Noble or Apple (iBooks/iTunes). And it’s certainly not Google eBooks, Smashwords, Diesel, or Sony.

Amazon’s main competition is Kobo, for the simple reason that, as best anyone can figure (since all of these companies are keeping their numbers close), Kobo is not only keeping pace with Amazon in many arenas outside of the U.S., in a few cases it is the market leader.

It has 50% market share in Canada (its home market) and France, while also making serious inroads in Japan (a forecasted $1.9 billion dollar market by 2015), where its only serious competition is Sony.

While Amazon announced that the Kindle will launch in Japan soon, the real game-changer in all of this is Japanese ecommerce giant Rakuten, which acquired Kobo in late 2011/early 2012, bringing massive funding to Kobo’s war chests and obviously making Japan (and Asia, and the global market) a top priority in the war of the e-readers.

If you are an independent author and buy into the idea that your work should be read globally, and not just where Amazon decides to open an e-store, then you should be paying attention to what Kobo is doing now…and what they will do in the next 12-18 months.

Writing Life
One of the major moves Kobo is making for authors is the launch of Writing Life, a self-publishing platform that follows in the spirit of KDP and PubIt. Luckily for us, it appears that Kobo has not only taken to heart the lessons learned from KDP’s ground-breaking and PubIt/B&N’s website failure, they’re interested in competing directly with those platforms by upping the ante with more lucrative royalty rates and incentives:

Royalty Rates
The numbers below were sent to me from Kobo’s support team. While the numbers for the U.S.and Canada aren’t anything special, check out the thresholds for Great Britain, the Eurozone, andAustralia:

Kobo vendors will receive a 70% or 45% royalty rate on each eBook sold through Kobo Books, depending on the price of their eBook and the territory in which the eBook is sold. eBooks that are priced according to the following pricing rules are eligible to receive a 70% royalty rate.

Currency        Pricing Rule
CAD                     $2.99 – 12.99 CAD
USD                     $2.99 – 12.99 USD
GBP                     £0.99 – 7.99 GBP
AUD                    $0.99 – 11.99 AUD
EUR                     €0.99 – 12.99 EUR
HKD                    $7.99 – $99.99 HKD

See what I’m seeing? First, a 45% royalty rate, presumably for the lowest priced titles.

Second, an incredibly low threshold for the 70% royalty rate in all the other sample markets (the Hong Kong dollar trades roughly at .12:1.00, so it may look high, but $7.99 HKD is only $1.03 USD). This is very good news indeed: 70% royalties on books priced at roughly $1.50 USD at the high end (GBP) to just over $1 USD at the low (AUD, HKD).

Free Days
From Kobo Support:

We are looking into bringing features and new ways to feature your books as we speak. One advantage that Writing Life provides is that you are able to make your book for free at any point in time.

No more 5 days out of 90 for free sales. “Free at any point in time” means flexibility in promotion, a (partial) dream come true for indie authors. (I say partial, because I don’t see any e-distributor besides Smashwords allowing a coupon or discount system, which I think is the missing link in truly robust promotional control of our books.)

A Better Looking Product
Kobo has announced that it’s committed to sticking with the powerful and elegant .EPUB format, which allows for enhanced formatting that Amazon’s .mobi requirements does not.

The submission requirements are nearly universal as well:
– DOC and DOCX
– OPF
– ePub
– TEXT
– MOBI
– HTML

It should be easier than ever to get your books formatted, beautified, and onto a platform where it can be bought and read.

Why You Should Care
Beyond the obvious benefits of increased royalty rates and enhanced distribution, we should all be blowing kazoos and handing out streamers anytime someone comes forward to give Amazon competition.

Because we hate Amazon? No.

Because we love Amazon and we want to see it get better.

Because true competition ensures that Amazon will never get complacent, or take its content providers (authors) for granted, or be tempted to shave off a percentage or ten from royalties when corporate quarterly profits are down. We should all be pulling for Kobo to succeed in a big way…because when Amazon faces true competition, we’ll know that e-publishing has truly come into its own.

Resources
Check out some screenshots of the Writing Life beta.

Check out the Writing Life page (mostly just promotional messaging, but still cool).

Read the rather amazing account of Kobo springing into life and being sold for over $300 million dollars two years later.

Addendum
Author Joseph Nassise was asked to beta-test Writing Life and wrote about his experience on Kindleboards. As I said, I’m a little late to the game…but Kobo’s royalty information is new, I believe.

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Writer of crime fiction, psychological drama, and dark humor.

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Posted in Epublishing News
22 comments on “Kobo: The Heavyweight Challenger?
  1. yoga-adan says:

    matthew, any thoughts about going direct w/kobo vs via smashwords?

    would the free anytime pricing be available for those distributing through the latter?

    with your new info, i think i’m beginning to see kobo / amazon as more like the NFL / AFL of old days 😉 go earl campbell and willie joe nameth 😉

    • Matthew Iden says:

      Hi Adan –

      As much as I want to support Mark and SW, I can only imagine that the Writing Life platform is going to be light-years better than the MeatGrinder. Anecdotal but reliable accounts (Blake Crouch) suggest that Kobo support for authors is responsive, efficient, and helpful. If they’ve taken that same attitude, plus any lessons learned from KDP and PubIt, then they may well have the Cadillac of self-pub platforms.

      Which puts SW a distant second in terms of distributing to Kobo. I mean, even if SW managed to convince Amazon to accept MeatGrinder distribution (which they won’t), who would use it over the KDP panel? It’s simply too easy and too efficient to use the vendor’s own platform if it’s done well.

      Re: free anytime pricing, I don’t know. I guess it comes down to whether Kobo is legally required to offer equivalent Terms of Service to authors no matter how they arrive at Kobo’s doorstep…but I don’t have an ounce of law or business school training, so that’s out of my realm! A great question, though, because SW’s remaining amazing author incentive are coupons. It would almost be worth dist. through SW rather than Writing Life for that.

      Almost.

      • yoga-adan says:

        good thoughts on that matthew, thanks

        i did think of one thing i almost for sure would prefer for going direct with kobo, not having to change my formatting that i felt presented my book the way i wanted, by being able to directly submit my epub file

        and i would assume, but don’t know, that like other direct platforms, the payout threshold via direct etf pmt will be low, ie, at or around $10 in royalties for the threshold to pay the author

        more info soon from them i bet 😉 thanks again 😉

  2. Chazz says:

    Great post! Kobo could be a game changer and you make an excellent point about having a coupon option for promotion. That’s one thing I love about Smashwords and it’s somewhat amazing other platforms haven’t adopted the coupon option to allow authors more promotional power.

    I wanted to deal directly with Kobo and contacted them. For some reason that now escapes me, Kobo disallowed that and told me to publish on Kobo through Smashwords. If they’re amping up their platform, I think it’s time I took another look at it since I do like a choice of several options. As a result, I do have a few things on Kobo (but that was done despite their policies at that time.)

    The danger I see with Kobo’s “any and all free days you like” policy is that it will lead to too much stuff going up for free and staying there permanently, thus diluting the power of free. Given how disadvantageous Amazon’s new algorithm appear to be, I’ll definitely reconsider my publishing options. Thanks you for the information. Very helpful. (Pointed my readers your way for this post, too.)

  3. […] on matthew-iden.com Please spread the word:TwitterFacebookPinterestEmailPrintStumbleUponDiggTumblrRedditLike […]

  4. jakeescholl says:

    When Kobo first came out I really wasn’t a fan. Now, it sounds like it’s going to be a leader. Interesting, 🙂

    • jakeescholl says:

      Also it’s smart of Kobo to add .mobi to .epub conversion. An Amazon author can send them the .mobi that’s already created.

      • Matthew Iden says:

        Hey Jake – thanks for stopping by. Kobo has quite a ways to go to be a leader…hope I didn’t overstate things too much! But with Rakuten acquiring them and dumping boatloads of cash into the project, the stakes are much higher than they were.

        Here’s when it would get really interesting: if Apple and Sony see this competition from Kobo and say to themselves, “well, now. someone else is taking on some market risk to challenge Amazon. Maybe now’s a good time to step in.” Then, real global competition will start and it will be the e-Shootout at the Digital OK Corral.

        Re: .mobi to .epub. Yes, very smart, but also smart b/c .epubs are so much more flexible than .mobi in terms of emulating traditional bookmaking. A well-done ebook is a thing of beauty and, with so many other things attracting a reader’s attention, it couldn’t hurt to have a reputation for creating textually rich ebooks as well as great writing, eh?

  5. Jack says:

    Meatgrinder leaves a lot to be desired. Dollars to doughnuts, it’s basically a built on top of a multithreaded version of Calibre customized for a server, with some custom code layered on top.

    I say that, because it has the same unfortunate problem with regard to style interpretation that Calibre has. Not to say that isn’t a technological accomplishment, just one that has not kept up with the advancements on many other more accessible platforms.

    I am thrilled that Kobo will allow me to directly upload my ePub, rather than having to go through conversion. It’s fantastic for competition, and I am cheering for their success.

    • Matthew Iden says:

      Hey Jack – Thanks for hanging out. I, too, have banged my head on both the Meatgrinder and Calibre. I can’t complain too much about two free pieces of software that make (at least partially) my life as an indie possible, but both can seriously try your patience.

      And, yes, also cheering for Kobo’s success. It really can only mean good things for authors. Joe Nassise’s brief descriptions of the beta-panel for upload and sales metrics was pretty interesting (the link under “Addendum,” above). Juicy bits there.

  6. Thanks so much for the information, Matthew. It’s much appreciated!

    • Matthew Iden says:

      Hi Peazy – You’re very welcome! I’m planning on keeping tabs/bugging Kobo so I can get more info as it comes out. Their future success could have a huge impact on epublishing and that affects all indies.

      Can I lobby for a Like from you? I have no idea if it gets me noticed by WordPress, but someday I’d love to make it on their Writing homepage…maybe that would help. 🙂

  7. Mark Leslie says:

    Matthew — I tried to send an email to you the other day providing you more info about Kobo Writing Life – I either got your email address wrong or perhaps it just ended up caught in your spam filter. But I’d love to touch base with you. (I work at Kobo)

  8. […] paper business. Competition instead my be emerging from the ashes of Borders… In the shape of Kobo. I would have said – a little while back – that this was not terribly likely, but here […]

  9. […] As I mentioned in last week’s post, this is an important step for independent authors everywhere because, unlike many other competitors of Amazon, Kobo is perhaps the best-positioned globally to make a splash in the digital book market. It has major market share in a handful of countries that Amazon has shown little interest in (France, Canada) and were recently acquired by Japanese e-commerce giant Rakuten, providing much needed financial backing—and an Asian focus to their interests–to the Canadian/Japanese e-book company. […]

  10. Has anyone seen their contract for publishers? Has anyone had any experience in getting paid by this Japan-based company? I always get nervous when companies are based overseas, esp. when in Asia. (I learned with painful experience with mainland-China-based operations.)

    • Matthew Iden says:

      Hi Karen – the Terms of Service are available after you register with (but before you agree to be bound by) Writing Life. This is the extent of any contract they offer.

      As for getting paid, I don’t have any experience with them yet, but buy my book Telling Your Tale and I’ll let you know 😉

      Perhaps I’m being needlessly optimistic, but I don’t foresee a problem. It was originally a Canadian-based arm of Indigo Books, Canada’s leading brick and mortar book store. Worst case scenario: you upload your books, some sell, and you wait 45 days to see if they pay you. If they don’t, you remove your books and re-double your efforts on Amazon.

      But there will be SO many eyes on this, I can’t imagine they’ll screw writers on this. There’re all kinds of reasons for them to do it right, and none to do it wrong.

  11. The past several months I’ve noticed my Kobo sales (via Smashwords) picking up steadily while Barnes & Noble sales have been falling into oblivion. Not sure why but happy to embrace Kobo and do whatever I can to promote there. Also just uploaded directly to Kobo yesterday. Enjoyed the entire process except I simply could not get the preview to download for any of my titles. Published anyway but would have liked to have seen a preview first. Maybe it’s because they were swamped. Will try again at 3am or something.

    • Matthew Iden says:

      Hey Jason – Great to see you drop by. Another author friend of mine could see her preview, but kobo’s .epub converter had centered her entire book. I’m sure they’ll take a few weeks to iron out the kinks including, hopefully, the preview issue.

      BTW, I assume this was before you hit the publish button? I ask b/c I was able to see my published preview only by downloading the PC Kobo reading app (not really surprising, really, but I guess I assumed the preview would be an inline webpage view…). Perhaps the pre-publish preview works the same?

      Something that hasn’t been mentioned much, but I think is awesome, is that Kobo imports Goodreads reviews and ratings as well as Facebook comments. Since I’m spending hours a day trying to improve my presence on GR, it’s a huge help to have this integration instead of having to trawl for ratings/reviews on an unrelated social media site (“Hey, I really appreciate your email saying you liked my book, but could you create accounts on Amazon, Shelfari, Goodreads, Librarything, Barnes & Noble, Smashwords, and Kobo so my would-be readers can see the same great review?”).

  12. […] Matthew Iden examines Kobo as a competitor to Amazon in Kobo: The Heavyweight Challenger? […]

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